Most regulatory government agencies to monitor the degree of compliance. These tasks are usually delegated to bureaucrats who, as self interested agents, may engage in corrupt behaviour. Opportunities for bribe taking are most likely to arise when the government (principle) is imperfectly informed about the degree of compliance, but the bureaucrats (agents) are fully informed. This paper outlines a strategy which may be employed to prevent corrupt behaviour.
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Paper provided by University of Adelaide - Department of Economics in its series Papers with number
99-4.